Kodak Improves Operating Performance in 1Q 2015

Eastman Kodak Company reported financial results for the first quarter of 2015, which reflect continued improvement in operating performance.
 
Operational EBITDA totaled $12 million, an improvement of $21 million year-over-year on a comparable basis, after adjusting for currency exchange and non-recurring intellectual property revenue. The loss from continuing operations before income taxes improved to a $50 million loss from a $60 million loss in the 2014 first quarter.
 
The 2015 first quarter net loss was $54 million, compared to a net loss of $34 million in the first quarter of 2014, which included $19 million in income from discontinued operations related to Kodak Alaris.
 
Sales in the first quarter of 2015 were $427 million, a decline of $61 million or 13% from $488 million in the first quarter of 2014, as a result of the adverse impacts of currency exchange and the expected declines in revenue from legacy products. The currency impact and decline in legacy products more than offset significant increases in sales of key strategic products, including Kodak SONORA Process Free Plates, Kodak FLEXCEL NX Plates and the Kodak PROSPER Portfolio.
 
“I am pleased with our first quarter performance and we are clearly seeing the benefits of our new divisional structure,” said Jeff Clarke, Kodak CEO. “Our continued progress in improving productivity and reengineering our cost structure, with $35 million in year-over-year operating expense savings in the first quarter, is reflected in the improved performance. Our transition to sustained growth and profitability will become more evident in the second half of the year as we continue to drive revenue growth in key strategic products and leverage our improved operating performance.”
 
Among the results from the divisions:
 
Print Systems Division (PSD), Kodak’s largest division, had first quarter 2015 sales of $254 million, a decline of $34 million or 12%, from $288 million in the prior-year quarter, driven by the impact of currency exchange and competitive industry pricing. For the fourth straight quarter, unit volume of digital plates increased, led by strong continuing demand for Kodak SONORA Process Free Plates. At the end of the first quarter, the number of customers using SONORA Plates reached 2,274, up 12% from year-end 2014.
 
The Operational EBITDA for PSD increased to $13 million in the first quarter of 2015 from $12 million in the 2014 first quarter. Increases in aluminum costs and competitive pricing pressures were more than offset by cost reductions and manufacturing productivity improvements.
 
Enterprise Inkjet Systems Division (EISD) had sales of $39 million for the first quarter of 2015, a decrease of $9 million or 19% from the first quarter of 2014. The decrease was attributable to the expected decline in revenues from legacy inkjet printing systems and the impact of currency exchange in the first quarter of last year. Operational EBITDA for EISD was negative $13 million for the quarter, essentially flat with negative $12 million in the first quarter of 2014.
 
Micro 3D Printing and Packaging Division (MPPD) had revenue of $31 million in the first quarter of 2015, compared to $29 million in the 2014 first quarter, an increase of $2 million or 7%, driven by a 27% increase in unit volume for KODAK FLEXCEL NX Plates, which was partially offset by the negative impact of currency exchange.
 
MPPD Operational EBITDA for the quarter was break-even compared to negative $2 million in the prior year, with the benefit of increased sales of consumables and cost reductions partially offset by the impact of currency exchange and investments in Micro 3D Printing.
 
Commercial production of silver mesh film for touch screen sensors is expected to begin during the second quarter at the Eastman Business Park manufacturing facility. Kodak is building a similar facility to produce the silver-based sensor film at its plant in Xiamen, China, where it expects to begin production by late in the year. Kodak also recently announced it will independently pursue development and production of copper mesh film for touch sensors.